NCERT Solutions for Class 12 Economics II Chapter 4 Determination Of Income And Employment – Here are all the NCERT solutions for Class 12 Economics I Chapter 4. This solution contains questions, answers, images, explanations of the complete chapter 4 titled Determination Of Income And Employment taught in Class 12. If you are a student of Class 12 who is using NCERT Textbook to study Economics I, then you must come across chapter 4 Determination Of Income And Employment. After you have studied lesson, you must be looking for answers of its questions. Here you can get complete NCERT Solutions for Class 12 Economics I Chapter 4 Determination Of Income And Employment.
NCERT Solutions Class 12 Economics Chapter 4 Determination Of Income And Employment
Here on AglaSem Schools, you can access to NCERT Book Solutions in free pdf for Economics for Class 12 so that you can refer them as and when required. The NCERT Solutions to the questions after every unit of NCERT textbooks aimed at helping students solving difficult questions.
For a better understanding of this chapter, you should also see summary of Chapter 4 Determination Of Income And Employment , Economics, Class 12.
Class | 12 |
Subject | Economics |
Book | Introductory Macroeconomics |
Chapter Number | 4 |
Chapter Name |
Determination Of Income And Employment |
NCERT Solutions Class 12 Economics chapter 4 Determination Of Income And Employment
Class 12, Economics chapter 4, Determination Of Income And Employment solutions are given below in PDF format. You can view them online or download PDF file for future use.
Determination Of Income And Employment
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Question & Answer
Q.1: What is marginal propensity to consume? How is it related to marginal propensity to save?
Ans : Marginal propensity to consume is the ratio of change in consumption expenditure to change in total income. \(M P C=\frac{\Delta C}{\Delta Y}\) Marginal propensity to save refers to the ratio of change in saving to change in income \(\mathrm{MPS}=\frac{\Delta S}{\Delta Y}\) Marginal propensity to consume and marginal propensity to save IS equal to one or MPC = 1- MPS, MPS: 1- MPC MPC + MPS: 1 there MPS: Marginal propensity to save MPC = Marginal propensity to consume \(\begin{array}{l}{\Delta \mathrm{sc}=\text { Change In consumption expenditure }} \\ {\Delta \mathrm{Y}=\text { Change in total Income }} \\ {\Delta \mathrm{S}=\text { Change in saving }}\end{array}\)
Q.2: What is the difference between ex ante investment and ex post investment?
Ans : Ex-ante investment is the amount of Investment which firms plan to invest at different level of Income in the economy Where as Ex-post Investment is the amount realised or actual investment in an economy during a year.
Q.3: What do you understand by ‘parametric shift of a line’? How does a line shift when its (i) slope decreases, and (ii) its intercept increases?
Ans : Parametric shift is a graph due to change in the value of a parameter. (i) A positively sloping straight line swings upwards at its slope is decreases. (ii) A positively sloping straight line shifts upwards in parallel as its Intercept is increased.
Q.4: What is ‘effective demand’? How will you derive the autonomous expenditure multiplier when price of final goods and the rate of interest are given?
Ans : It in an economy as people become more thrifty they end up saving less or same as before in aggregate. This theory produced by Keynes "When people start saving money Instead of spending it. In response to growing concerns about a recession. they actually make the recession worse." Rise in MPS means a fall in MPC. When MPC falls. aggregate consumption expenditure In the economy falls It leads to rise Inventory level producers and firms would plan to reduce the production It will reduce the demand for factor services and factor incomes. As a result the total volume of saving generated in the economy would fall or remain unchanged
Q.5: Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (A) is Rs 50 crores, and MPS is 0.2 and level of income (Y) is Rs 4000 crores. State whether the economy is in equilibrium or not (cite reasons).
Ans : \(\begin{array}{c}{\text { Aggregate demand is given as }} \\ {\text { AD }=\overline{A}+b(y)} \\ {\overline{A}=50 \mathrm{MPC}(\mathrm{b})=1-\mathrm{MPS}=1-0.2=0.8}\end{array}\) After putting values AD = 50+ 08 x 4000= 3250 crores Result AD of ₹3250 crores in less then Y (income) of ₹4000 crores. Hence, the economy is not at equilibrium.
NCERT / CBSE Book for Class 12 Economics
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All NCERT Solutions Class 12
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